Gas up, blame Chicago

Gas prices at a few Central Okanagan gas stations jumped 10 cents Wednesday night.

Dan McTeague with gasbuddy.com suggests you fill up, before other stations follow suit.

Several stations are still selling regular fuel at 114.9 per litre. He said if you can still find it at that price, get it before it reaches the new level of 124.9.

We're not alone either. prices have shot up across much of the country. In Newfoundland today, prices were up as much as 20 cents per litre.

Some of the blame for our rise in price can be placed on the situation in Northern Alberta, specifically Suncor's inability to produce both oil and gasoline.

"Suncor announced last night it doesn't have the ability to produce as much gasoline," said McTeague.

"It's scrambling to find supplies to meet its contracts. One of the three refineries (Edmonton), is having trouble producing gasoline."

That's on top of it not being able to produce enough oil to pump through the Kinder Morgan pipeline.

The bigger issue, according to McTeague, lies further east.

"All wholesale prices of gasoline in Kamloops, Kelowna, throughout the Okanagan, are really based on what happens in the Chicago gasoline futures markets. Those have shot up 37 cents a gallon in the past two weeks."

He said gas station operators are paying about $1.095 wholesale for a litre of gas in Kamloops and throughout the Okanagan. When you add their retail margins and GST, there's not much room left to make a profit.

"The price is going up everywhere. It's likely going to stay that way until things settle down in Chicago, and we can get a better read on how soon Suncor can get back on its feet, and how quickly oil production can get back to where it should be."

McTeague said two major refineries in the Midwest, one in Ohio and another in Michigan, are both down right now, causing the jump in gasoline futures.

He said it's happening at a time when demand for gas in the United States is at an all-time high.

It could be a few days, or even a few weeks, before the market stabilizes.


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